Claim fund ‘could destabilise employers’ liability market’

The employers’ liability insurance market could be destabilised if the government presses ahead with plans to set up a fund for untraceable claims, Biba has warned.

The Department for Work and Pensions (DWP) published a consultation paper last month outlining proposals for an Employers’ Liability Bureau, to be funded from a levy on insurers, like the Motor Insurers’ Bureau.

Biba technical services manager Steve Foulsham said: “There is a concern that the costs will affect employers’ liability rates in the market and that, in turn, this could lead to a destabilisation in the market.”

He explained that the employers’ liability market was potentially less stable than motor due to the smaller number of insurers offering such cover and the unpredictable nature of the claims involved.

“It’s in nobody’s interest to destabilise the market by putting insurers out of business,” Foulsham said, adding that Biba supported the DWP’s allied proposal to establish a database for untraced employers’ liability claims.